Thursday, January 19 2006 12:37 Hrs (IST) - World Time -

Kolkata: Communist Party of India (CPI) Marxist (M) General Secretary Prakash Karat yesterday (Jan 18,2006) warned the United Progressive Alliance (UPA) Government against pursuing the policies of privatisation, disinvestments and winding up of public sector units and banks 'under the guise'of reforms.

Instead the UPA should accept the alternative strategy put forward by the left to raise resources for funding social sector projects, he said.

"The Government is saying that they are touching the non-navaratna companies and not the navaratna ones. And the Government believes that disinvestments should be an inherent part of resource mobilization. But the sale of shares in public sector units to garner a few thousands crores of rupees is bad policy, bad economics and bad politics. We cannot accept this," he told a seminar.

"We have to confront the ideology of privatisation and debunk the rationale of privatisation put forward by international capital and agencies and their supporters in India," he said speaking at the seminar on disinvestments in public sector units.

He said the Left parties have proposed to the UPA government an alternative strategy to raise resources for funding social sector projects that included taxing security transactions and capital inflows and increasing tax rates on luxury goods and services, including cars.

The CPI(M) general secretary demanded mopping up of tax arrears, crackdown on tax evasion and recovery of non-performing assets.

Maintaining that the accumulated cash reserves of 50 central public sector undertakings amounted to over Rs 2.2 lakh crore amounting to about 7.5 per cent of the GDP, Karat said there was under investment in PSUs and sought its reversal to reinvigorate them.

"We do need reforms in public sector primarily because of the way it was being managed. There was need for autonomy, professional management and to face the challenges. We are against mismanagement and corruption", he said.

"There was need for restructuring of the public sector units", he added.

The CPI(M) leader said, "The disinvestments in banking and financial sector is more dangerous because in the modern economy financial sector play a key role which is sought to be grabbed by the international financial capital".

Three banks had already sold 49 per cent shares while in the Punjab National Bank the government holding was only 53per cent.

He demanded that UPA Government must put a stop to the 'creeping privatization in the banking sector".

"The UPA Government was seeking to bring a legislation to amend the Banking Sector Regulation Act which would pave way for abolishing the voting cap of ten per cent", he said adding that Left parties would not accept it.

He said the CPI(M) was opposed to the moves to allow the foreign banks to take over private Indian banks.

"The ideological motive dictated by the international financial agencies to assault the public sector. Dismantling and sale of public sector companies would not be accepted by the left parties", he said.

The seminar was organized by the Bank Employess Federation of India's West Bengal unit.